Charlie Baker signs Transportation Climate Initiative, businesses concerned over growing cost of gas

Massachusetts became one of three states and the District of Columbia on Monday to sign onto a controversial carbon tax initiative that aims to slash greenhouse gas emissions but leaves businesses concerned increasing costs will hit their bottom line as they struggle to rebound from the coronavirus pandemic.
The “trailblazing” multi-state partnership will reduce motor vehicle pollution by at least 26% and generate over $1.8 billion in Massachusetts by 2032, Gov. Charlie Baker said in a statement announcing the partnership on Monday.
“By partnering with our neighbor states with which we share tightly connected economies and transportation systems, we can make a more significant impact on climate change while creating jobs and growing the economy as a result,” Baker said in a statement following a virtual meeting with participating governors.
But the agreement between Baker and Democratic governors from Connecticut, Rhode Island and Washington D.C., includes just a quarter of the 12 states initially expected to participate. The other Northeast and Mid-Atlantic states expressed ongoing support for the program but did not sign on to the Memorandum of Understanding.
The regional effort, called the Transportation Climate Initiative, was spearheaded by Baker’s administration but has received pushback from some governors over increased costs, particularly as the economic fallout from the coronavirus pandemic took root.
By the state’s own estimates, the program will increase the cost of gas somewhere between 5 and 17 cents per gallon. The cap-and-invest program will set a cap on vehicle emissions and mandate fuel distributors to buy permits for the carbon dioxide they emit — a cost businesses say will be handed down to the consumer.
“TCI is perhaps best summed up from a participant in a virtual TCI listening session—a left-wing climate justice advocate—who commented that, ‘It’s taxing poor people, so we can subsidize rich people’s electric cars.’ That observation couldn’t be truer,” said Paul Diego Craney of the right-wing Massachusetts Fiscal Alliance.
Supporters are loathe to call the program a tax, explaining the price tag comes with myriad benefits including improved public health and billions for green transportation.
Past studies have shown transportation accounts for more than 40% of Massachusetts’s greenhouse gas emissions and is the largest source of air pollution.
Chris Dempsey, Director of Transportation for Massachusetts, praised the agreement, saying it “will bring significant public health, environmental, and economic benefits to residents of Massachusetts.”
“The COVID-19 pandemic has laid bare deep inequities in our public health and transportation systems. The images of essential workers struggling to get to work to provide us with health care, food, and other necessities in the midst of the pandemic cannot be unseen. They deserve better. TCI will be an important part of our recovery from the pandemic as well as an enduring mechanism for lowering greenhouse gas emissions, reducing the public health impacts of pollution, and growing our innovation economy,” Dempsey said.
The National Association of Convenience Stores, which represents more than 90% of retail fuel sales nationwide, however, said the program will “exacerbate the foreseeable adverse economic consequences TCI will generate if it is implemented in the face of the ongoing financial and transportation challenges created by the COVID-19 pandemic.”
“These consequences will be most acutely felt by the northeast region’s low-income communities. There are more efficient and effective ways to commercialize
alternative fuel technologies,” the organization said in a statement.
Energy and Environmental Affairs Secretary Kathleen Theoharides said the agreement could generate annual proceeds for the participating governments that could exceed $366 million by 2032 — money that will be reinvested into clean energy and infrastructure.
Per the MOU, each state will be required to set aside at least 35% of TCI-generated benefits for communities that are underserved by clean transportation alternatives, disproportionately bear the costs of the current transportation system, or suffer disproportionate impacts of vehicular pollution and climate change.
“The next decade is pivotal for all levels of government to take deliberate action to avoid the worst impacts of climate change, and this historic multi-jurisdictional program will unlock solutions that reduce emissions and protect our most vulnerable residents in environmental justice communities and communities underserved by transportation options,” Theoharides said.
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